Washington Okoth Odhiambo v Golden Palace Casino [2020] KEELRC 1361 (KLR)
The bottom line
#A Kenyan court ruled a casino unfairly sacked its employee and must pay him Kshs 100,000, confirming businesses can be sued under their trading names.
What this practically means
#Executive summary
#Key legal issues
#Competency of the suit against a trading name
The Cause was competent; an unincorporated entity can sue and be sued under Article 260 of the Constitution, and in any event the Respondent issued the employment contract in the name Golden Palace Casino.
The Respondent argued Golden Palace Casino was only a trading name of Nakuru Lucky Investments Ltd and incapable of being sued, relying on the Deposit Protection Fund Board decision. The Court held that under Article 260 of the Constitution a person includes an unincorporated body, following the Trusted Society of Human Rights Alliance decision, so the traditional principle was no longer good law. Further, the employer issued a contract on Golden Palace Casino letterhead under section 10(2)(b) of the Employment Act and could not disown it.
Standard/burden of proof of unfair termination
The Claimant discharged the burden under section 45(7) of the Employment Act by testimony corroborated by the Respondent's illogical account.
The Claimant testified he was summoned, accused of fraudulently assisting a customer, told his services were no longer required, arrested and later denied entry to work. The Respondent's contrary account - that the Claimant was still in employment and had been issued a show-cause letter - was unsupported: no show-cause letter was produced and no explanation given for unpaid February 2016 wages. The Court found the Claimant's version more probable.
Procedural fairness
The Respondent failed to prove issuance of written notice under section 35(1)(c) or a hearing under section 41; procedural fairness threshold not met.
Section 35(1)(c) of the Employment Act contemplates written notice of termination and section 41 requires a hearing before termination. The Respondent did not prove it issued written notice or conducted a hearing. The Court found it more probable that the Director verbally told the Claimant his services were no longer required and that he was denied entry on returning to work after release by the Police.
Substantive fairness
The Respondent led no evidence of valid and fair reasons for termination.
Beyond the burden and procedural analysis, the Court assessed whether the Respondent had valid and fair reasons for the termination. It noted the Respondent did not lead any evidence to justify the dismissal, including the allegation that the Claimant attempted to fraudulently assist a customer. Accordingly the Court found there were no valid and fair reasons, rendering the termination substantively unfair.
Remedies
One month's salary as compensation for about a year of service, one month's pay in lieu of notice, accrued leave pay and February 2016 salary, totalling Kshs 100,000/-.
Considering the length of service of about a year, the Court held the equivalent of one month's salary (Kshs 25,000/-) fair as compensation. Because no written notice was issued, one month's pay in lieu of notice was awarded. The unrebutted testimony that February 2016 wages were unpaid supported that head, and reliance on section 10(3) and (7) of the Employment Act supported accrued leave of 21 days' entitlement.
Legal principles established
#- Under the Constitution, 2010, an unincorporated entity can sue and be sued; the traditional principle that a trading name cannot be sued is no longer good law.
- An employer who issues a contract of employment in a trading name holds out that entity as the employer and cannot disown the contract or allege misjoinder.
- The burden is on the employee to demonstrate, at the first instance, that an unfair termination of employment occurred, under section 45(7) of the Employment Act.
- An employer who fails to produce a show-cause letter it alleges was issued, and offers no explanation for unpaid wages, casts doubt on its account of the termination.
Court orders
#- 1.Declaration that the Respondent unfairly terminated the Claimant's employment
- 2.Award of compensation equivalent to one month's salary of Kshs 25,000/-
- 3.Award of one month's pay in lieu of notice of Kshs 25,000/-
- 4.Award of accrued leave pay of Kshs 25,000/-
- 5.Award of February 2016 salary of Kshs 25,000/- (total Kshs 100,000/-)
- 6.The Claimant to have costs of the Cause
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (cause for unfair termination of employment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Washington Okoth Odhiambo v Golden Palace Casino [2020] KEELRC 1361 (KLR)", Case Analysis (2020). Cause No 474 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1361/eng@2020-03-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.